The Credit Repair Organization Act [CROA] does not create a non-waivable right which prevents the enforcement of an arbitration clause for a lawsuit alleging violations of CROA.

Respondents applied to, and obtained, a credit card by signing an agreement to binding arbitration for any claim, dispute, or controversy arising from or related to the credit account. The district court found that the arbitration clause in the contract was unenforceable under the Credit Repair Organization Act (CROA) because language in the statute shows Congress’ intent to create a non-waivable right to sue in a court of law. The court of appeals affirmed finding that the plain language of the statute, “you have a right to sue a credit repair organization that violates the [CROA]” combined with “any waiver by any consumer of any protection provided by or any right of the consumer in this subchapter…(1) shall be treated as void” showed Congress’ clear intent to create a non-waivable right to sue in a court of law.

The Supreme Court held that since CROA is silent about claims under the act being subject to binding arbitration, the Federal Arbitration Act (FAA) requires the arbitration agreement to be enforced. The Court reasoned that if Congress had intended to exclude CROA claims from arbitration, Congress would have explicitly said so in the Act. The FAA demands that courts enforce arbitration agreements even when federal statutory claims are at issue unless the FAA has been expressly overridden by a command by Congress. The language of CROA of giving consumers “a right to sue a credit repair organization that violates the [Act],” combined with the fact that CROA prohibits waiving “any right of the consumer under this subchapter” does not foreclose binding arbitration as an option; it merely contemplates judicial enforcement but not as the sole means of enforcement.

The Court further held that because arbitration clauses were very common at the time Congress enacted CROA, if Congress had wanted to prohibit agreement to binding arbitration, Congress would have done so clearly and directly.